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Environmental, social, and governance risks and opportunities

EPA Proposes Designating PFAS as Hazardous

PFAS is no doubt a developing environmental catastrophe but this rule is yeeting the matter without regard that this solution may do more harm than good
ESG

The U.S. Environmental Protection Agency is proposing to designate two of the most widely used per- and polyfluoroalkyl substances (PFAS) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the “Superfund” law.

The proposal applies to perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), including their salts and structural isomers, actually, a group of more than 4,000 man-made chemicals. The proposed rule was published on September 6, 2022.

PFAS has been manufactured and used in a variety of industries around the globe, including in the United States since the 1940s and until recently in consumer products under brand names ranging from Teflon to Scotchgard and Gore-Tex. PFAS is very persistent in the environment and in the human body, meaning these chemicals don’t break down, they accumulate over time, and as such have been referred to as “forever chemicals” making them a developing environmental catastrophe.

EPA describes evidence from laboratory animal and human epidemiology studies indicate that exposure to PFAS may lead to cancer, reproductive, developmental, cardiovascular, liver, and immunological effects. 

A peer reviewed 2020 study cited approvingly by the EPA describes 99.7% of Americans have a detectable PFAS in their blood!

EPA had previously set health advisories for both PFOA and PFOS at 70 parts per trillion (ppt). In June 2022 EPA, citing new science and concern for lifetime exposure, lowered the health advisory levels to 0.004 ppt for PFOA and 0.02 ppt for PFOS. EPA describes those levels as “near zero” and admits they are “below EPA’s ability to detect at this time” (.. translation, current science cannot detect PFAS chemicals at levels below 4 parts per trillion), meaning the safe level of consumption for those two chemicals is practically zero.

But, adding PFAS to the CERCLA list of hazardous substances may not be wise. Some have suggested that the CERCLA designation will delay and increase the costs of cleanup of sites and also without either a widely accepted standard or methods for cleanup, may be Faustian. The unintended consequences on water utilities and fire departments as well as airports and marinas not to mention local and state governments, cannot be overstated.  But of greatest concern to the average business is that the designation of hazardous substance, if the rule is finalized, will result in increased reporting including in Phase I Environmental Site Assessments that are widely used in many if not most commercial transactions in the U.S. today (from the sale of a building to refinancing a bank credit line). Phase l studies seek to identify “recognized environmental conditions .. the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property ..” and with this rule, PFAS will fall within the definition, and become a recognized environmental condition (a REC) requiring further investigation and action.

To be clear, today PFAS is not a REC, but those chemicals would be under the proposed rule, triggering many if not most Phase l assessments to report a REC in, on, or at the property; again, with no accepted means of quantifying it or of cleanup.

PFAS is no doubt a developing environmental catastrophe but this rule is yeeting the matter without regard that this solution may do more harm than good.

It will not lead to cleanups nor mitigate potential adverse impacts to human health or the environment, but rather put at risk most businesses that will now have a REC in nearly every Phase l, perverting the very purpose of Phase l assessments that drive the environmental industrial complex, but today allow the vast majority of businesses to navigate the risk.

As we described in a blog post on the subject last year, PFAS in a Phase l Environmental Site Assessment? “the broad consensus of environmental professionals in the know is that there is simply no good reason to consider PFAS in a commercial real estate transaction and only negatives that can flow from these widespread chemicals that are nearly everywhere and are in nearly everyone’s blood.”

It is suggested that should this proposed rule be adopted, the ASTM standard for the Phase l environmental site assessment process, which has been incorporated into Federal law, “to define good commercial and customary practice in the United States of America for conducting an environmental site assessment of a parcel of commercial real estate” will have to be promptly revised and altered to take into account the all but automatic REC finding for nearly every property.

All those with an interest in real estate should be aware of how pervasive PFAS is in the economy and the environment, and the associated risk associated with these forever chemicals, but they also should vocally react to proposed changing laws and the resultant emergent litigation as the legal system leapfrogs ahead of the science.

EPA is asking for public comment on the proposal for 60 days. Comments must be received on or before November 7, 2022 at docket EPA-HQ-OLEM-2019-0341 on www.regulations.gov  and you may wish to tell EPA this proposed rule is a bad idea. It may be the quintessential example of “if the only tool you have is a hammer everything looks like a nail,” but an after the fact hazardous substance designation will not repair the planet.

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